Most people dive the pumphouse side, as there's easy entry and a big concrete pad under the obvious buoy (for teaching). There are no motorised boats allowed on the lake, and the pumphouse side gets visited occasionally by flatwater kayakers only. A flag is a good idea, but not essential.
The pumphouse side has toilets and a cafe to warm up in afterwards. The owner of the cafe gets a bit tetchy about wet wetsuits.
The terrain on the pumphouse side is a bit dull, to be honest. You can try and find the "caves" but they really are just shallow overhangs....
You can also dive near the sailing club (near North Shore hospital), but the terrain is even more dull - and this is where most of the sail boats hang out if it's windy!
IMHO, the best side of the lake to dive is Sylvan Park. It drops off quickly, and there's a large rock wall that runs parallel to the shore that gives you something to look at. From the carpark, go down the boat ramp on the right hand side and swim out about 10-20m then drop down. As you follow the bottom down, you'll find the drop off fairly easily. Head right (facing out), as left gets shallow and has not much to see. Watch out for windsurfers, a flag or an SMB is a good idea if it's windy and people are out.